Mahanagar Telephone Nigam Ltd (MTNL) has written to the telecom department, requesting spectrum in the 1800 and 2100 MHz bands to launch 4G services in order to expand its service offering amid rising competition in the telecom market, confirmed MTNL CMS PK Purwar.

New Delhi: At a time when MNTL is mulling revival options to drag itself out of losses, the telecom operator has taken a bold step – it has approached the government seeking allotment of 4G spectrum in two different bands in exchange for equity, reported news agency PTI. Mahanagar Telephone Nigam Ltd (MTNL) has written to the telecom department, requesting spectrum in the 1800 and 2100 MHz bands to launch 4G services in order to expand its service offering amid rising competition in the telecom market, confirmed MTNL CMS PK Purwar.

"To survive in the mobile telephony market,4G presence is a must. MTNL has submitted a proposal to the Department of Telecom (DoT) for allotment of 4G spectrum recently," Purwar told PTI. It may be noted that the telecom operator is seeking 4G spectrum to offer services in Delhi and Mumbai circles. He said, " In the market, over 85 per cent downloads are taking place in data in 4G. In this competitive landscape, every single operator has to have a presence in 4G. To compete effectively, MTNL also requires 4G services in its portfolio.”

In the national capital, MTNL has sought a 10MHz in the 1800 band and for Mumbai, 5 MHz in the 2100 band. According to the report, the telecom operator plans to start 4G offerings in FY19. It may be noted that currently MTNL has spectrum in the 900, 1800 and 2100 MHz bands, and at least 5 MHz in 2100 bands is used for 3G services.

"We have said that government has two roles -- one as licensor and another as a promoter of MTNL. As a licensor, they are duty-bound to take their financial charges for allocation of spectrum. MTNL has requested that payment should be taken by the government in the form of equity. As per our initial assessment, the spectrum block should cost roughly Rs 6,500 crore," he explained.

However, MTNL plans to make the payment for acquiring the spectrum in equity shares based on the price of spectrum allocated. Purwar added that these steps would help MTNL avoid additional debt. Ass of now, the government holds 56 per cent stake in MTNL while LIC has 19 per cent share; the rest of the equities is distributed among the public.

As of now, MTNL’s debt stands at a whopping Rs 17,000 crore, with an annual interest burden of Rs 1,450 crore. The telecom operator, like many others, has been impacted by the fierce competition witnessed in the sector. In FY15, MTNL’s losses were at Rs 2,893 crore; Rs 2,005 in FY16 and Rs 2,970 crore in FY 17. With so many existing challenges it would interesting to see whether the request would be approved.